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You gotta love this story as it proves that despite being CEO of Goldman Sachs (before Hank Paulson discharged him in a bloodless vacation coup) and a former Governor of New Jersey, Jon Corzine was at his core a herd following lemming, or simply an idiot, whichever you prefer.
Corzine has been running MF Global, a publicly traded investment firm since he lost the Governor's race to Chris Christie a few years ago. Now, as MF Global spins in its final death spiral, awaiting bankruptcy, Bloomberg reveals the source of the trouble:
Corzine increased the firm’s risk and used its own money to trade, including investments in European sovereign debt. Corzine began adding sovereign debt of Italy, Spain, Belgium, Portugal and Ireland about a year ago, according to a company presentation. The positions accounted for 16 percent and 12 percent of net revenue in the quarters ended in March and June, the firm said.
MF Global, which had a market value yesterday of $280.3 million, holds $6.3 billion of sovereign debt that it’s using in repurchase agreement trades with customers. MF Global reported its worst-ever quarterly results on Oct. 25, losing $191.6 million in the three months ended in September.
So a year ago, when a 3rd-grader could have told you that the European bailout mess was just getting started, Corzine thought the coast was clear and started buying sovereign debt of the most bankrupt of all Euro nations. Bwahahaha. I love my job sometimes.
No doubt, Corzine will emerge from the bankruptcy intact and wind up at another hedge fund like the thrice-failed John Meriweather of Solomon Brothers and LTCM. Who cares, for now we laugh and dance on the grave of Corzine and MF Global.
Dumbass.
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